Large-Size LCD Panel Capacity to Grow at Most Conservative Pace in Four Years During 2017, Says TrendForce

The global capacity of large-size LCD panels by area is projected to grow 6.6% annually to reach 208 million square meters in 2016, reports WitsView, a division of TrendForce. The supply of LCD panels this year has been disrupted by the February earthquake in Taiwan and Samsung Display’s problems with transitioning to a new manufacturing process. WitsView further forecasts that the global large-size LCD panel capacity for 2017 is set to grow at the slowest pace since 2014 at an annual rate of just 3.9%, totaling 216 million square meters.

WitsView noted that though Taiwan’s Innolux and some Chinese panel makers will continue to take on new capacities for large-size LCD panels in 2017, South Korean panel makers will stop LCD panel production at some of their facilities at the same time. Consequently, the overall expansion of the large-size panel capacity will be more conservative compared with past years.

WitsView also pointed out that since 2015 South Korean panel makers have been heavily involved in adjusting their product mixes and developing the OLED technology. One of the most direct approaches to carrying out their plans has been the selective closures of large-size a-Si LCD panel fabs.

Demand for LCD panels used in IT products has been on a slump in recent years, thus Samsung Display (SDC) decided to close its Gen-5 fab L5 in 2015. Likewise, LG Display (LGD) also stopped the production at its Gen-6 fab P6 in the first half of 2016. LGD plans to revamp P6 to make small- and mid-size LTPS panels. Looking ahead to 2017, South Koreans’ Gen-5 facilities such as SDC’s L6 and LGD’s P4 will cutting some of their LCD panel production as well.

Furthermore, SDC will also be supplying less LCD panels for TVs in 2017 as to focus more on producing their AMOLED panels. Thus, SDC will its Gen-7 fab L7-1 in the fourth quarter of 2016. As for LGD, its Gen-8.5 fab P8 will undergo a restructuring of production capacity, of which 10~15% will be devoted to the manufacturing of large-size AMOLED TV panels.

According to WitsView, the main contributors to the capacity growth for large-size LCD panels in 2017 will be Innolux’s Gen-8.6 fab in Lujhu District, Taiwan, BOE Technology Gen-8.5 fab in Fuzhou, China and HKC’s Gen-8.6 fab in Chongqing, China.

BOE Technology (BOE) has designated its Fuzhou fab for the production of 43-inch panels, which are currently in short supply on the market. However, BOE will have to go through an adjustment period before the panel maker could reach the same proficiency for this size segment as it does for the 32-inch and the 55-inch in terms of mass production.

As for HKC, the company used to be just a vendor of display systems and does not have much experience in the production of LCD panels. Getting its newly built Gen-8.6 fab running be a challenge for HKC, the utilization of the fab’s capacity will limited during the initial period of production.